The Warren Buffett effect: Japanese trading firms strategise to navigate potential sell-off risks

Yasutaka Tamura reports on the intricate dance between Warren Buffett's investments and Japanese trading firms. Berkshire Hathaway's stakes in these companies elevated their global standing, yet the spectre of potential sell-offs looms. Buffet's influence, highlighted by a strategic exit from Taiwan Semiconductor Manufacturing Co., prompted these firms to diversify shareholders. While Berkshire's long-term commitment is uncertain, Japanese companies are proactively fortifying their positions and emphasising robust earnings to mitigate potential fallout, recognising that, in the end, fundamentals outweigh fleeting market sentiments.

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By Yasutaka Tamura

Warren Buffett can cause executives angst when he invests in their companies.

Japan's trading firms illustrate this point. Berkshire Hathaway Inc. bought stakes in them in August 2020, which raised their international profile and attracted other investors. Over the next four years, the five companies outperformed the broader market. 

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